Here are the views of billionaire investor Ray Dalio on the state of the U.S. economy and the market.
Ray Dalio, the billionaire investor who founded Bridgewater Associates, the world’s largest hedge fund, opined that it is highly likely that the U.S. economy will stumble into a recession before 2020, the year of the next presidential election.
Putting to rest concerns that the U.S. economy is in a bubble, Dalio said it might not take long before the U.S. economy moves on to a “bust” phase.
”I think we are in a pre-bubble stage that could go into a bubble stage … The probability of a recession prior to the next presidential election would be relatively high, maybe 70 percent”, said Dalio during an appearance at the Harvard Kennedy School’s Institute of Politics.
Although Dalio stepped down from the hedge fund’s day-to-day operations almost a year ago his views on the market and on the economy continue to be closely followed.
During the event, when asked by Lawrence Summers, a former Treasury secretary and former president at Harvard, on what advice he would give individual investors who may have been rattled by the market’s recent turbulence following years of steady gains, Dalio said, investors need not panic and need to have a sound plan.
People should buy when they are frightened and sell when they are not, said Dalio.
“The greatest mistake of the individual investor is to think that a market that did well is a good market rather than a more expensive market,” said Dalio.
Refusing to discuss Bridgewater Associates’ portfolio and moves, which he cautioned could be easily misinterpreted, including its recent short bets against a number of European companies.
“Don’t read anything into that. You’ll probably be misled,” said Dalio.